What are you talking about? ... You don't have to break half your gear for insurance to make sense, my 70-200 f/2.8 L IS II alone costs around $ 2000 ... paying 2.5% (i.e. $50 a year) is peanuts compared to not having an insurance and having the lens stolen/lost ... would you rather pay $ 50 or $ 2000.

OK, I oversimplified the numbers, but really... would you rather pay $2000 now or $50/year forever? How about $500/month? If you preferred $50/month, congratulations, you've understood the time value of money.

Where exactly it breaks even depends on the interest rate etc, but nonetheless there is a monthly sum that's effectively the price of an "eternal loan" for $2000. For argument's sake let's say it's $200/month. Then your choice would be certain loss of $50/month with insurance, or possible loss of $200/month without. How likely would you have to be to destroy the camera for insurance to make sense?

And finally, do you think you can estimate that probability better than insurance companies?

I insure nothing. Regardless of how high the risk is, I'm sure the insurance companies have figured it out better than I could, and if it's profitable for them, it can't be for me, in the long run.

On a grand scale, for long-term you're correct. On a realistic scale though, it comes down to risk tolerance.

Of course. I wasn't arguing nobody should take insurance, only explaining why I don't. Mostly it comes down to mental risk tolerance, rather than financial - how you feel about uncertainty.

I also travel a lot and take chances with my gear. I've traveled in places where I was told "robbery is near certainty", and I have once destroyed a DSLR by slipping on a rock while crossing a river (an L lens also got wet but was fine after cleaning). But no regrets: I've done the math, and if I'd consistently insured my photo gear over the 15 years (at the time) I'd been using SLRs it would've cost me way more than replacing that body did.

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I am not an insurance company that can afford to "write off" the capital loss. For an insurance company, it makes sense to insure me, I'm likely 100% profit. But to me, the cost is worth it.

But in general, especially for a hobbyist, insurance does not pay. Compare the insurance premiums with what the bank would charge for a loan. If insurance company wants 2.5% of the value of the item and interest rate in the bank is 5%, you'd have to figure you break half of your gear for insurance to make sense.

What are you talking about? ... You don't have to break half your gear for insurance to make sense, my 70-200 f/2.8 L IS II alone costs around $ 2000 ... paying 2.5% (i.e. $50 a year) is peanuts compared to not having an insurance and having the lens stolen/lost ... would you rather pay $ 50 or $ 2000.

OK, I oversimplified the numbers, but really... would you rather pay $2000 now or $50/year forever? How about $500/month? If you preferred $50/month, congratulations, you've understood the time value of money.

Where exactly it breaks even depends on the interest rate etc, but nonetheless there is a monthly sum that's effectively the price of an "eternal loan" for $2000. For argument's sake let's say it's $200/month. Then your choice would be certain loss of $50/month with insurance, or possible loss of $200/month without. How likely would you have to be to destroy the camera for insurance to make sense?

And finally, do you think you can estimate that probability better than insurance companies?

You have gone from over simplifying to over complicated, we are talking about 2.5% insurance per year ... so I'm not sure what you are goin on about "eternal loan" and $200/month I am really interested to know which insurance company is charging you $200/month (i.e. $1200 per year for a $2000 lens)